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Planning Success for
Independent Business Owners

Peters Case

 

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CASE STUDY


Prior to our analysis, Peters Family Living was a well established and respected furniture, appliance and electronics store. Peters Family Living was a second generation company founded in 1944 and had experienced many years of success and profit. Bill’s older brother was retiring and Bill was in the process of finalizing a buy-out of his brother. The company was now experiencing financial stress and was not profitable.

Issues:

  • P&L loss.

  • Inadequate ROI especially now that the buy-out added to the expenses of the company.

  • Loss of market share as competitors had moved into their city and had eaten away at their market.

  • Owner did not have enough time away from the store to enjoy his family and outside interests.

  • No way to develop his people.

  • Too owner-centered.

  • Stress on the owner often was communicated publicly.


Comments:


Bill’s vision was to have a company that would be profitable for many years to come and to have a company that was run through its management team. 

Objective:

  • Create a management team to build a mission-driven, principle-based synergistic team where all departments function interdependently and all are aligned with a company mission.

  • Define everyone’s roles, tasks, and accountabilities.

  • Develop a communication tool to develop and maintain employees.

  • Clearly define the lines of communication.

  • Define the role of the sales manager.

  • Measure and track the critical aspects of sales.

  • Train the sales manager to maximize the return on each customer asset.

  • Define a Peters Family Living selling system.

  • Train the sales team in the Peters Family Living selling system.

  • Become a goal-driven company.

  • Eliminate price negotiation.

  • Institute delivery charges.

  • Aggressively sell extended warranties.

  • Develop a General Manager that would keep the company successfully operating even in the absence of its owner.

JRM Solution:

  • Re-defined lines of communication.

  • Promoted a long-term veteran to sales manager.

  • Eventually promoted another long-term veteran to General Manager.

  • Created a management team consisting of the owner, sales manager, office manager, and operations manager who later became the general manager.

  • Created a company mission statement as a team.

  • Trained the sales manager.

  • Trained the management team to work as a synergistic, cohesive team that worked interdependently with all employees aligned with the company mission statement.

  • Trained the team on how to have effective meetings.

  • Created job descriptions defining everyone’s roles, responsibilities, tasks, and measurements.

  • Created job appraisals and trained on how to effectively perform them.

  • Defined the company selling system and trained all salespeople on the system.

  • Set goals for performance.

  • Redefined compensation based upon performance.

  • Tracking system for sales performance and goal attainment was instituted.

  • Instituted a delivery charge.

  • Stopped price negotiation.

Results

  • Quantifiable results

    • Owner income increased dramatically.

    • Gross margin increased significantly.

    • The company has remained profitable for years. 2007 was one of the toughest years in our industry.  The company produced a profit of almost 10% in addition to owner's appreciable compensation.

  • Re-energized the owner in his business.

  • Owner could take vacations with his wife without negatively affecting the business.

  • Everyone is on the same page.

  • Everyone understood their roles and responsibilities.

  • Created a team approach to decision-making and problem solving.

  • Accountability became the model.

  • Employees are happier because the owner is happier and communicates significantly better with his staff.

  • Implemented a tool to help the owner and sales manager manage results.

  • Implemented a tool to help each salesperson attain their income goals.

  • Developed a system to train and continually develop the sales team.

  • Owner has a management team that he is accountable to for the first time.


Many years later the skills that were developed continue to be applied. The owner believes in the selling system that was developed for his company and continues to hold people passionately accountable for utilizing the system. Others in his marketplace have experience intense stress during economic downturns but Peters Family Living continues to flourish. Organizational processes that were developed are still utilized yielding a company that offers a high quality of life to the owner, his family and the employees of the company. Financial review processes keep the company safe.

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